These minutes reflect
discussion and debate at a meeting of a committee of the
Minutes
Present:
Charles Speaks (chair), Brittny
McCarthy Barnes, Stanley Bonnema, Charles Campbell, David Chapman, Robert
Cudeck, Tom Gilson, Gary Jahn, Abu Jalal, Cynthia Jara, Thomas Klein, Michael
Korth, Timothy Nantell, Kathy O'Brien, Richard Pfutzenreuter, Terry Roe, Susan
VanVoorhis, Warren Warwick, Susan Carlson Weinberg
Absent:
Jean Bauer, Bruce Brorson, Marvin
Marshak, Thomas Stinson, Michael Volna
Guests:
Elizabeth
Eull (Office of Budget and Finance)
Other:
none
[In
these minutes: (1) the biennial request;
(2) the football stadium]
1. The Biennial Request
Professor Speaks convened the
meeting at
Ms. Eull distributed copies of the
information being provided to the Board of Regents at their October 11
meeting. She recalled that the
University has had a pattern of presenting very detailed biennial requests to
the legislature. This time the request
is focused on the importance of maintaining what the University has achieved
and what it needs to keep rolling.
Certain items remain a priority:
set and implement academic directions, support talented faculty and
staff, help students realize their educational goals, and building and
maintaining the academic infrastructure.
The University recognizes that the
state has significant financial problems.
If the University requested funding for all of the investments it wants
to make, the request could be well over $200 million. In limiting the size of the request (to a
total of about $96 million from the state) so that it is not dead on arrival at
the legislature, the request proposes to set up pools of funds to address
priorities. It does not specify that
certain amounts of dollars will be spent on specific items.
There are four primary areas
targeted for funding. (Numbers are
dollar amounts, in millions.)
Increase
over prior year
2003-04 2004-05
-- Set and implement academic directions 7.0 12.0
(seize opportunities to
invest in programs "on the cusp of prominence," sustain the best
departments, and build on recent initiatives)
-- Support talented faculty and staff 30.6 26.9
(2.5% annual general compensation increase, fringe
increases, and a pool to provide competitive compensation for all employees)
-- Help students realize their
educational goals 5.0 10.0
(e.g., technology in classrooms, undergraduate
advising/career services, graduate student support in highly-competitive
programs)
-- Build and maintain the academic
infrastructure 22.4 13.3
(the libraries, major
research equipment, seed capital for research projects, start-up costs,
research administration and compliance, facilities--utilities inflation, new
building costs, capital debt service, information technology and financial
systems)
The request proposes a total
increase of $192.2 million, of which half would come from the state and half
from the University. Of the University's
share of $96 million, 26% ($49.8 million) would come from internal reallocation
from current funds and 24% ($46.2 million) would come from tuition increases of
4.5% each year. The state would be asked
to increase the appropriation by $32 million each year, for a total of $96
million ($32 million the first year, carrying it forward to the second year,
plus an additional $32 million increment the second year). Asked what percentage of the University's 26%
would be new dollars, Ms. Eull said that none of it would be unless the
University finds a new source of funds other than tuition. What is the nature of the reallocation,
Professor Roe asked? It is calculated at
2.5% per year of the state appropriation, Mr. Pfutzenreuter said.
Professor Speaks reported that the
Budget Management Task Force, which advises the President and Executive Vice
President on financial matters, has a draft proposal to capture all of the
reallocation that occurs at the University.
The plan will come to the Committee but it will not be implemented in
the immediate future. If the Committee
and the administration support it, the University could have real numbers to
demonstrate what happens. How the
reallocation will be spread across the University will be decided by the
President, Mr. Pfutzenreuter said, in consultation with the Budget Management
Task Force. Either the University needs
to extract dollars from its base or it needs to find new money because the
amounts proposed in the biennial request must be spent. The reallocation will come about; what is not
clear now is HOW it will come about.
Professor Konstan concluded that
voluntary reallocation will not count.
In terms of marketing what the University is doing, replacing one
Sociology professor with another Sociology professor will not impress people;
$20,000 for journals will, he suggested.
Mr. Klein asked for an example of reallocation in the past that worked,
to give a flavor of how the process works.
Ms. Eull said that in the
There are a lot of examples in
departments, Professor Speaks said. The
transfer of positions within and across colleges is one. The Budget Management Task Force believes the
University needs to inform the legislature about these kinds of reallocation.
There have been editorials about the
Commission on Excellence, Ms. Barnes noted.
It says
Reallocation is a way to keep the
University competitive, Professor Roe observed, but will that mean that some
college budgets will rise or fall or will they be about the same? If the University receives the entire package
it is requesting, some support unit and college budgets will increase or
decrease, Mr. Pfutzenreuter said. If the
state does not agree to the partnership proposal, all bets will be off and the
University will have to make a different set of decisions.
Professor Konstan recalled that the
President, in his State of the University address, said the University has to
begin to make plans to deal with deferred maintenance and depreciation. Mr. Pfutzenreuter said the reference was to
technology and systems planned for this biennial budget proposal. Professor Speaks noted that of the $22.4
million for the academic infrastructure, $5.4 million each year of the biennium
is for technology and systems; are those fixed costs, he asked? They are not, Mr. Pfutzenreuter said; the
University could, if it had to, wait to make improvements.
Of the $22.4 million increase in
infrastructure funding, $14 million is for increased debt service; the cost of
debt service goes up more steeply in 2003-04 than it does in 2004-05.
How does the 2.5% reallocation
compare with what state agencies, MNSCU, and other top research universities
are doing, Professor Konstan asked? Ms.
Eull said that state agencies are being told to plan on 90% of the funds they
now have--and within that amount they are to absorb any cost increases. They are being provided no guidance on salary
increases. The University selected 2.5%
for salary increases because that is the general inflation number the
Department of Finance has used in recent years.
She said she did not know what is happening at other research
universities. It would be beneficial to
have a study and to ask the legislature to pay a bigger share in the next
biennium. Mr. Pfutzenreuter said the
University will have to be patient as it awaits a new president and economic
improvement.
Would the level of the tuition
increase also be subject to reconsideration if the legislature does not accept
the University's proposal, Professor Jahn asked? Mr. Pfutzenreuter said he could not speak for
the President or Regents but he noted that certain expenses are fixed
(buildings, fringe benefit costs) and the remainder are trade-offs that would
have to be considered. Tuition could be
increased or new investments could be decreased; he said he did not know how
things would work out. If the 4.5%
figure becomes known, does it take on the character of a promise, Professor
Jahn asked? Mr. Pfutzenreuter said the
University always made it clear that tuition increases depended on the
partnership proposal; Ms. Eull recalled that the University told the
legislature last time that there would be 3% tuition increases if the
legislature appropriated what was requested.
It did not so tuition increases ended up at 13%/16% for the last two
years.
How does reallocation relate to the
10% exercise the state agencies are going through, Professor Campbell
asked? The University has also been
asked to identify what it will do with 90% of its budget. This will be the subject of discussion with
the Regents in November but the University will decline to be specific about
what it would do with a 10% cut. It will
tell the legislature it can manage 2.5% reallocation each year.
Professor Speaks thanked Ms. Eull
and Mr. Pfutzenreuter for the information.
2. The Football Stadium
Professor Speaks now inquired of his
colleagues how they wished to proceed on the matter of the stadium. The Committee has discussed it from time to
time; there has been the sense that it would be premature to take a
position. It is unclear when the
Committee would be well-enough informed to take a position; if it were to take
a position, should the statement be limited to financial matters or also
address the Committee's role in planning?
The Committee is also aware that there is much activity taking place to
which it is not privy; it does not want to subvert positive initiatives.
At the same time, there is the sense
that the Committee has a responsibility to enunciate its own convictions to
represent faculty, staff, and student views on complex issues.
Professor Speaks said he did not
wish to try to persuade the Committee to take a position but IF it is inclined
to do so, the time is near, because the University must respond to the state
legislature in December and Mr. Pfutzenreuter and Mr. Maturi will inform the
Committee in November what the administration's recommendations to the Regents
will be in terms of the stadium predesign and the Memorandum of
Understanding. He noted that the
statement from the Faculty Consultative Committee, which had been provided to
Committee members, did not take a position; it raised a series of questions.
Does the Committee wish to make a
statement or watch events unfold? If it
wishes to make a statement, it should discuss a draft in two weeks and have a
final statement ready by early November.
Committee members offered a variety
of comments.
-- The proposal is so non-specific, and
there are so many issues, that it is difficult to decide what to say. The question of whether the Vikings will stay
or go, and the University's potential liability, make it impossible to reach a
conclusion; they are not dependable partners and it is not clear how one can
make plans with them. (Professor Cudeck)
-- A statement now might not be
meaningful; the Committee could only repeat that the details matter, that it is
afraid they will be unacceptable, and that perhaps it could support a proposal
if they were acceptable. The Committee
needs to be clear on what the issues mean for faculty, staff, and students, and
if it believes the Regents should say no, it should provide them very specific
reasons why not. (Professor Konstan)
-- The Committee has an obligation to
take a position; the FCC statement is only from the faculty. The proposal is hypothetical and is only considering
one plan; the Committee should ask to see different options in locations, a
University-only stadium, financial options, and political considerations. But there has been nothing said about
anything except a joint-use University-Vikings stadium. (Ms. Barnes)
-- There are parts of the FCC statement
that this Committee might help with. The
details are unknown to the Committee, or perhaps not even well-enough developed
to know. But this Committee could
identify deal-breaking questions: what
would compromise the University's mission or put the University at a financial
risk a reasonable person would not accept.
(Mr. Klein)
-- Mr. Pfutzenreuter and Ms. O'Brien
could help the Committee with the information gap (for instance, there were
originally 10 principles that were condensed to five and subsequently modified
by the Board of Regents; the Committee has not yet seen the modified
principles). Nor does the Committee know
what is in the Memorandum of Understanding with the Vikings or when there will
be a Memorandum that the Committee could react to. (Professor Speaks)
-- What the Committee might do could also
vary with its intent. If the intention
is to issue a strong statement because it does not believe a joint-use stadium
is in the best interests of the University, it would write the statement one
way. If its intention is to affect the
negotiation process, it would write it another way. (Professor Speaks)
-- The University has shown a lack of
creativity in dealing with people who come to campus. There has been no thoughtful assessment about
what it might do if 60,000 people come to campus a Sundays/Saturdays per year
(people who have enough money, at the least, to buy Vikings tickets). Should there be lectures? Breakfasts? Is anyone exploring the benefits beyond
acquiring a stadium and legislative appreciation for helping retain the
Vikings? How might this support be used?
-- The University has not had good luck
in combining its activities with business (e.g., MALG). These activities consist of things no one is
aware of; one worries about what one doesn't know. (Professor Warwick)
-- The Committee is unlikely to have any
influence on the Regents (look, for example, at the exchanges about the
presidential search-advisory committee).
Something at this level of generality should be led by the Faculty
Consultative Committee or Senate Consultative Committee; this Committee should
be supportive of their efforts if they take the lead. This Committee should attend to financial and
planning issues in consultation with FCC/SCC as it develops a final statement,
which should be aimed at persuading the administration to take a particular
position with the Regents. This
Committee has a clearly delineated role.
FCC/SCC SHOULD take the lead and this Committee should urge it to do
so--and support it. FCC should provide a
charge to this Committee on finance and planning issues. (Professor Campbell)
-- The Committee should support FCC and
monitor financial issues it raises and identify any additional ones but this
Committee should not take a leadership role.
There is much negative comment about a stadium; the University should
ask what opportunities will be created as well.
(Mr. Klein)
-- What if the University took the
position that the Vikings should have a stadium, not on the University campus,
and the University would simply go in as a tenant? (Professor Konstan)
When can the Committee expect to see
a Memorandum of Understanding, Professor Speaks inquired? The process is behind, Mr. Pfutzenreuter
said; he said he did not know when it would be available.
Ms. O'Brien commented that all of
the concerns she has heard at this meeting, and seen in the FCC statement, are
also concerns she has heard voiced by her administrative colleagues. The University has been handed a difficult
set of cards to play. It is important to
recognize, she told the Committee, that this issue will not go away until there
is a solution. The process that led to
building the Metrodome took 12 years. At
the same time, the leases that run through 2011 mean time is getting close in
terms of the lifecycle of facilities construction; in another couple of years,
2011 will be getting VERY close. The
University will have a football team and it will play somewhere, she said. The University must learn from the predesign
and the Memorandum of Understanding to help inform whatever solution there may
be. The consultants are doing a very
good job for the University; she noted that the
Mr. Pfutzenreuter said he endorsed
the questions that have been raised by the Committee and the FCC statement but
said that any recommendation should wait on decisions about the predesign and
the Memorandum of Understanding.
Professor Konstan said the FCC
questions were useful; the Committee should follow up where it has expertise
and then push the larger issue back to FCC or SCC in order to bring the student-faculty
voice together in one place.
Professor Speaks thanked everyone
for attending and adjourned the meeting at
--
Gary Engstrand